HMOs Get Another Shot at State Contract

Health Alliance and Humana have another chance to stay on the books as providers of health insurance for state employees in Illinois.

A legislative panel paved the way for Illinois to settle a lawsuit with Urbana-based Health Alliance. The company sued last year after losing its state contract. State employees represent a significant share of its customers.

Julie Hamos, Director of the Department of Healthcare and Family Services, said as a condition of the settlement, the state is re-opening the bidding for state employee health insurance providers.

But she said that only applies to HMOs that operate primarily outside Chicago and surrounding counties.

“We wanted to create a smooth transition for our public employees and their families,” Hamos said. “This is the best opportunity for new bidders, potentially, to get some of that business, and to move ahead providing managed care for our public employees.”

Hamos stressed the settlement only requires a new bidding process. She said there is no guarantee a particular company -- or any company -- will be selected.

Hamos hopes the process will be finished in time for the upcoming open-enrollment period, which begins May 1.

A temporary agreement has allowed state workers to stay with Health Alliance in the interim.